Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
The Nifty took a breather today which is possibly due to the weekend knocking on the doors. The overall trend of the market continues to remain bullish and any dip or correction should be utilized to go long. 16,300 is the short term resistance which was crossed yesterday and today as well. If we can keep above that level, the index should zoom to 16,500-16,600.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research:
The market witnessed some lackluster movement and an attempt to hold the support level around the Nifty 50 Index level of 16200. The expected levels of the market are likely to be in the range of 16200 and 16500, and it is going to be crucial for the short-term market scenario to sustain above the 16200 Nifty50 Index level. The momentum indicators like RSI and MACD indicating a positive outlook to continue.
Rupee Close:
Indian rupeeendedflat at 74.15 per dollar, amidsellingsawin thedomestic equity market after theReserve Bank of India (RBI) has kept the key rates unchanged.
It opened 7 paise higher at 74.10 per dollar against Thursday's close of 74.17 and traded between 74.08-74.22
Market Close
: The benchmark indices ended lower on August 6 after Reserve Bank of India (RBI) has kept the repo rate unchanged at 4 percent and also maintained policy stance as ‘Accommodative’.
At close, the Sensex was down 215.12 points or 0.39% at 54277.72, and the Nifty was down 56.40 points or 0.35% at 16238.20. About 1728 shares have advanced, 1400 shares declined, and 120 shares are unchanged.
On the sectoral front, the metal, auto and IT indices ended higher, while selling was seen in the pharma, FMCG and infra names.
The midcap and smallcap indices rose 0.2 percent each.
Cipla, Reliance Industries, Shree Cements, UltraTech Cement and SBI were the top Nifty losers. IndusInd Bank, Adani Ports, IOC, Bharti Airtel and Tata Consumer Prodcts were among the top gainers.
Mohit Ralhan, Managing Partner & Chief Investment Officer, TIW Private Equity:
RBI has maintained the accommodative stance indicating that the primary focus area remains growth and economic recovery is more critical than inflation. This was on expected lines as RBI has been demonstrating sustained commitment to growth. The September and December quarters are critical given the risk of third wave of COVID-19 and RBI has implemented proactive measures to maintain adequate liquidity in the system.
The markets are in strong bull phase indicating significant confidence on India’s growth prospects and RBI’s policy stance extends a strong support to it.
Berger Paints Q1 results:
The company has posted net profit at Rs 140.5 crore versus Rs 15.1 crore and revenue was up 93.2% at Rs 1,798 crore versus Rs 931 crore, YoY.
Berger Paints India was quoting at Rs 821.40, down Rs 16.90, or 2.02 percent on the BSE.
Madhavi Arora, Lead Economist, Emkay Global Financial Services:
The MPC expectedly kept the key rates unchanged unanimously and reiterated its accommodative stance both on rates and liquidity. However one dissent on continuation of accommodative stance for foreseeable future shows the emerging split getting generated within the MPC. The MPC maintained that growth is still sub-par and needs consistent firm traction, and that continued policy support is vital for a durable growth revival.
However despite emerging inflation risks and sharp upward revision in FY22 inflation, MPC retained the view that inflation has transitory aspects, led by supply-side bottlenecks, even when they see inflation hugging the higher end of their tolerance band in the near term.
However, the focus was on Communication on liquidity management key amid evolving market risks and the yield curve management. The RBI reaffirmed longer tenor VRRRs as the first step toward normalization amid current bumper liquidity surplus and reinstated that the normalization of liquidity operations should not be confused with liquidity tightening.
BSE Power index rose 1 percent led by the Adani Green, Adani Transmission, Adani Green:
BSE Realty index shed 1 percent dragged by the Sobha, DLF, Godrej Properties
Devyani International IPO issue subscribed 44 times on final day
The initial public offering (IPO) public issue of Devyani International, the operator of quick-service restaurants chain KFC and Pizza Hut, continues to receive a strong response from investors as the issue had been subscribed 44.41 times by the afternoon of August 6, the last day of bidding.
The offer has garnered bids for 499.95 crore equity shares against an IPO size of 11.25 crore equity shares, generating bids of Rs 44,995 crore, the subscription data available on exchanges showed.
Retail investors have gone big on the IPO subscribed their portion 33 times. The portion set aside for employees was subscribed 3.96 times.
Richa Agarwal - Senior Research Analyst, Equitymaster
It is good to see more and more getting listed and becoming public across sectors amid the ongoing market rally and IPO rush.
However, we see this more as a long term option than a profitable proposition at current juncture.
Most of these IPOs are priced at exorbitant valuations that we would not be comfortable paying for even well established companies and promoters with a track record. We don’t think it will be prudent to compromise on margin of safety. We would rather wait to see how this companies perform on execution front post listing, and would prefer to enter at reasonable valuations for the ones that do well.
Market at 3 PM
Benchmark indices trading near the day's low level with Nifty below 16250.
The Sensex was down 222.30 points or 0.41% at 54270.54, and the Nifty was down 52.70 points or 0.32% at 16241.90. About 1640 shares have advanced, 1297 shares declined, and 94 shares are unchanged.
Rupee Updates:
Indian rupee is trading flat at 74.15per dollar, amid volatile trade seen in the domestic equity market after theReserve Bank of India (RBI) has kept the repo rate unchanged at 4 percent.
It opened 7 paise higher at 74.10 per dollar against Thursday's close of 74.17.
Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank:
Expectedly the RBI maintained status quo, attempting to maintain a fine balance between the risks to GDP and inflation. However, we believe that the increased risks to inflation especially as the economic activity is picking up pace has prompted the MPC into taking liquidity normalization measures ahead of our expectations. We expect additional liquidity normalization measures like overnight VRRR, increased quantum of higher tenure VRRR in the months ahead before expecting a reverse repo rate hike in December.
Piramal Enterprises Q1:
Consolidated net profit was up 8.8 percent at Rs 539.4 crore against Rs 495.6 crore (YoY). Consolidated revenue was down 1 percent at Rs 2,908.7 crore against Rs 2,937.3 crore (YoY). Consolidated EBITDA was down 13.7 percent at Rs 1,549.8 crore against Rs 1,795.5 crore (YoY). Consolidated EBITDA margin at 53.3 percent against 61.1 percent (YoY).
AU Small Finance Bank Q1:
Net profit at Rs 203.2 crore against CNBC-TV18 Poll of Rs 183.5 crore. NII at Rs 724 crore against CNBC-TV18 Poll of Rs 675.2 crore. Gross NPA at 4.31 percent against 4.25 percent (QoQ). Net NPA at 2.26 percent against 2.18 percent (QoQ).
Hindalco Industries Q1:
Standalone net profit at Rs 910 crore against loss of Rs 40 crore (YoY). Standalone revenue jumped 79.2 percent at Rs 13,298 crore against Rs 7,420 crore (YoY). Standalone EBITDA at Rs 2,096 crore against Rs 573 crore (YoY). Standalone EBITDA margin at 15.7 percent against 7.7 percent (YoY).
Anagha Deodhar – Chief Economist, ICICI Securities on RBI Monetary policy:
While the MPC’s rate action was along expected lines, the VRRR decision and one committee member voting against accommodative stance were early signs of normalisation. It upped inflation forecast for FY22 to 5.7%, a tad higher than our expectation and retained growth forecast at 9.5%.
We expect the normalisation to continue with the RBI hiking reverse repo rate in two steps starting early next year. Commenting on growth outlook, the committee said accelerated pace of vaccination, expected pick up in government expenditure, the recently announced relief package by the government and easy financial conditions are expected to aid revival.
On inflation, it said the current inflationary pressures are assessed to be driven by supply shocks and hence transitory. It also added that cutting fuel taxes can lessen the cost pressures.
Muthoot Finance Q1:
Net profit rose 15.5 percent at Rs 971.1 crore against Rs 840.8 crore (YoY). Revenue was up 13.8 percent at Rs 2,713.8 crore against Rs 2,385 crore (YoY).NII was up 17.8 percent at Rs 1,701.5 crore against Rs 1,444.5 crore (YoY).
European markets are trading flat with FTSE and CAC down marginally in the red
Market update at 2 PM:
Sensex is down 182.38 points or 0.33% at 54310.46, and the Nifty shed 36.60 points or 0.22% at 16258. IndusInd Bank, Adani Ports and IOC are the top gainers while Reliance Industries dragged the most.
Sandhar Technologies Q1:
Net profit at Rs 2.1 crore against loss of Rs 31.1 crore (YoY). Revenue at Rs 410.1 crore against Rs 129.3 crore (YoY). EBITDA at Rs 31.2 crore against EBITDA loss of Rs 12.7 crore (YoY).
Alkem Labs Q1:
Net Profit was up 11.4 percent at Rs 468.1 crore againts Rs 420.2 crore (YoY). Revenue was up 37.1 percent at Rs 2,731.3 crore against Rs 1,992 crore (YoY). EBITDA rose 13.6 percent at Rs 592.8 crore against Rs 521.7 crore (YoY). EBITDA margin at 21.7 percent against 26.2 percent (YoY). Other income at Rs 46.7 crore against Rs 55 crore (YoY). Tax expenses at Rs 75.9 crore against Rs 69.6 crore (YoY).
Likhita Chepa, Senior Research Analyst, CapitalVia Global Research:
The Indian benchmark is trading with a small negativity after 15300. We have observed a lackluster movement after continuous positivity in the market. RBI policy has no major impact on the market as the policy came on expected lines of the investors that there will be no change in the repo rate.
There is no change in the growth rate as well despite of the inflation concerns in the market which can give boost to the confidence of the investors in the recovery of the economy. Our research suggests 16200 will be an important support level in the market for the market to remain positive in the short term.
RITES gets letter of acceptance worth Rs 4,028 crore from Ministry of Railway:
RITES led consortium has secured a project for consultancy services from Bangladesh Railways for Construction of Dual Guage Railway Line from Bogura to Shahid M. Mansur Ali station, Sirajganj of Bangladesh Railway. Total fee income would be USD 8522,198 which is about Rs 63 crore.
Also, the company received Letter of Acceptance for execution of three new railway line turnkey projects from Ministry of Railways,
Government of India of Rs 4,028.11 crore.
Narayan Shroff- Director- Investments, Barclays Private Bank:
This is a policy on expected lines. There was almost unanimity on the street that the operational rates- repo and reverse repo would not be tinkered with and that’s gone according to script. The read out by the Governor clearly mentions upside risks to inflation, though it does seem that the RBI believes that despite recent hard prints on inflation, much of this is transitory given the expected normalization of commodity prices, supply side pressures easing and the anticipation of a normal monsoon.
Nitin Shanbagh, Head – Investment Products, Motilal Oswal Private Wealth:
RBI continues to prioritize growth and maintain financial stability as far as necessary. Having said, it remains mindful of anchoring inflation expectations.
While maintaining a balance between growth/inflation dynamics, RBI is likely to continue with orderly evolution of the yield curve through OMOs & GSAPs. Till durable growth recovery is seen, RBI may not resort to reversal of policy rates and would maintain sufficient liquidity in the system. However, RBI may gradually signal towards normalization of rates.
From investors point of view, focus should be towards investing in high quality roll down accrual strategies through a bar-bell approach viz. combination of short term and long term maturity strategies with weighted average portfolio average maturity of 4-5 years. For yield enhancement, investors can also consider investing upto 25% in well researched REITs, InVits, select high yield MLDs, etc.
Market at 1 PM
Benchmark indices were trading near the day's low with Nifty around 16250.
The Sensex was down 177.81 points or 0.33% at 54315.03, and the Nifty was down 42.70 points or 0.26% at 16251.90. About 1708 shares have advanced, 1190 shares declined, and 82 shares are unchanged.
BEML Q1 results:
The company has posted net loss at Rs 94 crore against loss of Rs 134 crore, while revenue was up 15.5% at Rs 451 crore versus Rs 390.5 crore, YoY.
BEML was quoting at Rs 1,332.90, down Rs 7.30, or 0.54 percent on the BSE.
A repo hike by fiscal-end: Dharmakirti Joshi, Chief Economist at CRISIL
Monetary policy across major central banks remains more yoked to growth than inflation at this juncture. Friday’s move by the Monetary Policy Committee (MPC) of the Reserve Bank of India to stand pat and accommodative shows it sees inflation as transitory.
Indeed, that’s the case on the supply side. But unlike advanced countries such as the US, inflation in India is over a high base and in spite of weak demand.
Companies have already begun passing on rising input costs to consumers to protect margins. The MPC will have to keep its eyes peeled on prices in the coming quarters.But with the clamour around prices getting louder, the MPC has also, like many others, raised its inflation forecast to 5.7% for the current fiscal from 5.1% in June.
As expected, the RBI has kept India’s growth outlook unchanged at 9.5% for this fiscal. Together with external demand, it sees domestic drivers of consumption and investment gaining traction.
TVS Srichakra Q1 earnings:
The company has posted net profit at Rs 1.1 crore against loss of Rs 37.2 crore and revenue was at Rs 495.3 crore versus Rs 212.1 crore, YoY.
TVS Srichakra was quoting at Rs 2,278.00, up Rs 20.60, or 0.91 percent.
Shishir Baijal, Chairman & Managing Director, Knight Frank India:
We welcome the RBI’s unchanged view on the ‘accommodative’ stance and commitment to maintaining the liquidity in the economy. Despite the inflationary pressures, RBI maintaining status quo on key policy interest rates and continuing with growth supportive policy stance was need of the hour. Extended period of historic low interest rates would ensure home loan rates remain at current benign levels and aid the revival of real estate sector.
We have also seen many real estate developers refinancing their borrowings at lower interest cost and benefit from the lower interest rate regime, which is crucial at this juncture when business operations are facing the pandemic pressure.
In addition to this monetary policy intervention, the time is ripe for the RBI and Government to undertake more valiant demand stimulant measures to help the economy to cross FY20 GDP levels and ensure a broad-based revival. The lower interest rate environment and demand stimulant measures from Government coupled with the on-going vaccinations is likely to encourage businesses and consumers to avail credit to expand their business or fulfill consumption requirements, thereby stimulating the economy.
Voltas Q1 results:
The company has posted 49.6 percent jump in its Q1 net profit at Rs 122.4 crore versus Rs 81.8 crore and revenue was up 37.7% at Rs 1,785.2 crore versus Rs 1,296.9 crore, YoY.
Voltas was quoting at Rs 1,062.00, up Rs 16.85, or 1.61 percent on the BSE.
Mahindra and Mahindra Q1 earnings:
The company has reported net profit before exceptional item at Rs 934 crore against Rs 39 crore in a year period.
Revenue of the company stood at Rs 11,763 crore versus Rs 5,589 crore, YoY.
Mahindra and Mahindra was quoting at Rs 766.00, up Rs 6.85, or 0.90 percent on the BSE.
Windlas Biotech IPO oversubscribed by 8.48 times:
The public offer of Windlas Biotech, the pharmaceutical formulations contract development and manufacturing organizations, has subscribed 8.48 times, garnering bids for 5.20 crore equity shares against the IPO size of 61.36 lakh equity shares, the subscription data available on exchanges showed on August 6, the final day of bidding.
The qualified institutional buyers have to put in bids at least 90 percent of their reserved portion to get the issue fully subscribed. So far their portion was subscribed 13 percent.
The portion set aside for non-institutional investors was subscribed 1.95 times, while the retail portion has seen a 15.94 times subscription.
Market at 12 PM
Benchmark indices were trading near the day's low amid volatility.
The Sensex was down 134.99 points or 0.25% at 54357.85, and the Nifty was down 22 points or 0.14% at 16272.60. About 1704 shares have advanced, 1144 shares declined, and 87 shares are unchanged.
Adani Ports, IndusInd Bank, Tata Consumer Products, Bharti Airtel and IOC were among major gainers, while losers included Cipla, Reliance Industries, Shree Cements, Nestle and HDFC.
Ravindra Sudhalkar, CEO at Reliance Home Finance:
The move by the Reserve Bank of India's Monetary Policy Committee to keep the repo rate unchanged at 4% was an expected move given the growth concerns hanging over the economy, especially from the impending third wave of the COVID19 pandemic. Even though inflation is high and a concern, any rate hike at this juncture would've been a deterrent to growth. Also, although the RBI maintained GDP growth forecast at 9.5% for FY22, Governor Shaktikanta Das has pointed out that the underlying conditions around aggregate demand are still weak.
For home buyers this removes any kind of uncertainty over interest rates as we can expect this accommodative stance to continue for some time. However, planning ahead and negotiating smartly with banks on home loans rates is always advisable.
Rupee Updates:
Indian rupee is trading flat at 74.16 per dollar, amid volatile trade seen in the domestic equity market after theReserve Bank of India (RBI) has kept the repo rate unchanged at 4 percent.
It opened 7 paise higher at 74.10 per dollar against Thursday's close of 74.17.
Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors:
The RBI kept the rates unchanged in its monetary policy statement and kept the stance accommodative. They kept the growth unchanged at 9.5%. The inflation was expected to be at 5.7% up from 5.1% for FY’22. One member has voted against the accomodative.
Bond yields rose on less dovish policy from RBI. The stock markets fell as the Amazon-RIL Future Group verdict went in favor of Amazon in SC. The rupee fell after making a high of 74.09 as RBI started absorbing inflows and importers bought dollars to hedge.
Krsnaa Diagnostics IPO subscribed 6.55 times on final day
The initial public offering of Krsnaa Diagnostics, one of the fastest growing diagnostic chains in India, has subscribed 6.55 times, receiving bids for 4.65 crore equity shares against IPO size of 71.12 lakh equity shares, the subscription data available on exchanges showed.
The retail response continued to be strong, putting in bids 24.47 times their reserved portion, and that of employees' portion was subscribed 55 percent.
The portion set aside for qualified institutional buyers was subscribed 1.44 times, while non-institutional investors have put in bids 5.56 times their portion set aside.
Market Updates:
Benchmark indices were trading with marginal losses amid volatility after RBI kept key rates unchanged.
The Sensex was down 91.41 points or 0.17% at 54401.43, and the Nifty was down 13.80 points or 0.08% at 16280.80. About 1721 shares have advanced, 1093 shares declined, and 79 shares are unchanged.
Deepthi Mathew, Economist at Geojit Financial Services
In an expected move, MPC kept the rates unchanged and continued with the accommodative stance. Though the MPC voted unanimously to keep the rates unchanged, votes for the continuance of accommodative stance were at 5:1. It shows that the inflation debate is getting more prominent. The forecast of inflation rate for FY22 was revised upwards to 5.7 percent from 5.1 percent announced earlier. RBI's assurance to conduct OMOs when needed would help to keep the bond yields in check.
Citi on Apollo Tyres:
Research house Citi has maintained buy call on the stock with a target at Rs 325 per share.
Though Indian operations were weaker, the European operations sprung a positive surprise, said Citi.
The outlook is positive with demand recovery across segments & stable pricing scenario in India. The FY22 earnings are lowered slightly as we cut our domestic estimates, it added.
Apollo Tyres was quoting at Rs 222.35, down Rs 0.05, or 0.02 percent on the BSE.
Rupee Opens:
Indian rupee opened 7 paise higher at 74.10 per dollar on Friday against Thursday's close of 74.17, amid volatile trade seen in the domestic equity market at theReserve Bank of India (RBI) has kept the repo rate unchanged at 4 percent.
On August 5, rupee ended flat at 74.17 per dollar against previous close of 74.18.
RBI Monetary Policy
| The projection for India’s real Gross Domestic Product (GDP) is maintained at 9.5 percent for FY22.
